NEW YORK (CNNMoney.com) -- Oil climbed above $77 a barrel Tuesday amid anticipation that crude supplies fell more than expected last week.
What prices are doing: Crude oil for March delivery rose $2.80, or 3.84%, to settle at $77.23 a barrel.
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Oil prices recovered from a 4-day retreat Monday, gaining on better than expected economic reports.
What's driving prices: The Energy Information Administration will release its weekly inventory report Wednesday.
"The main thing that could add to prices today would be expectations of lower inventories in the EIA report," said James Williams, president and energy economist at WTRG Economics. "There could be a surprise this week."
Analysts expect oil supplies to drop by 1 million barrels, gasoline stocks to increase by 1.5 million barrels and distillates to fall 1.2 million barrels, according to a survey conducted by research firm Platts.
Williams said the decline in supplies could be bigger than expected because of the oil spill in Port Arthur, Texas, last week that backed up about 7 million barrels of crude coming into the U.S.
Meanwhile, the dollar weakened versus the euro, also boosting oil prices.
What analysts are saying: Williams said prices will likely rise this week after an unexpected decline in inventory, but oil may fall over the next couple weeks as supplies build up again.
Down the road, Williams expects oil to drop as low as $60 a barrel on a swelling inventory.
"Longer term, the pressure from the fundamentals remains toward the downside," he said. "Crude oil inventories are at the high end of the normal range, gasoline inventories are above the high end of the normal range and distillates are way above the high end of the normal range." 
| Overnight Avg Rate | Latest | Change | Last Week |
|---|---|---|---|
| 30 yr fixed | 3.80% | 3.80% | |
| 15 yr fixed | 3.09% | 3.11% | |
| 5/1 ARM | 2.65% | 2.69% | |
| 30 yr refi | 3.77% | 3.86% | |
| 15 yr refi | 3.09% | 3.21% |
Today's featured rates:
| Index | Last | Change | % Change |
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| Dow | 12,454.83 | -74.92 | -0.60% |
| Nasdaq | 2,837.53 | -1.85 | -0.07% |
| S&P 500 | 1,317.82 | -2.86 | -0.22% |
| Treasuries | 1.74 | -0.01 | -0.80% |
| Company | Price | Change | % Change |
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| Bank of America Corp... | 7.15 | 0.01 | 0.14% |
| Sprint Nextel Corp | 2.62 | 0.09 | 3.56% |
| Cisco Systems Inc | 16.33 | -0.06 | -0.37% |
| Chesapeake Energy Co... | 15.81 | 0.23 | 1.48% |
| Ford Motor Co | 10.60 | 0.01 | 0.09% |
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